Tackling High-Interest Student Loans
Student loan debt is a major financial burden for many people in Central Ohio. According to the Federal Reserve, Americans collectively carry more than $1.6 trillion in student loan debt. So, if you're struggling to pay your student loan payments, remember that you're not alone. There are steps you can take to reduce your payments, pay your loans off more quickly and reduce the overall cost of your debt. Below are 4 options to help you tackle your high-interest student loans.
Better Understand Your Loan Terms
The first step to paying off your student loans is understanding them. Know what types of loans you have, how much you owe, and the interest rates for each. This information will help you determine which loans to prioritize and create a plan to pay them off. For instance, you may want to tackle your highest interest rate loan first, as this will reduce the amount of interest you pay over the life of your loans.
Make Extra Payments
Making extra payments on your student loans can help you pay them off faster and save money on interest. Even if you can only afford to make small extra payments, every little bit helps. Consider putting any windfalls or bonuses you receive towards your student loans. One easy way to do this is by making biweekly payments on your student loans (check with your lender). This will result in you making 13 months' worth of payments each year, which can accelerate your repayment plan.
Consider Refinancing or Consolidating Your Loans
Refinancing or consolidating your student loans can help you save money on interest and lower your monthly payments. Refinancing involves taking out a new loan with a lower interest rate to pay off your existing loans. Consolidation involves combining multiple loans into one loan with a single monthly payment. Both options can help you pay off your student loans faster and potentially lower your monthly payment. Although saving a percent or two on your loan may not seem like a big deal, it can amount to thousands, sometimes even tens of thousands of dollars in interest savings over the life of your loan!
Research Loan Forgiveness Programs
Depending on your field of study, you may qualify for loan forgiveness by serving in an underserved area that needs your specialty. In some cases, loan forgiveness programs can help you reduce or eliminate your student loan debt. If you work in education, medicine, or public services, explore loan forgiveness program options in your area.